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The Housing Wars’ Next Front

If Proposition 10 passes, San Francisco could have a once-in-a-generation fight over expanding rent control on its hands.

Editor's note: This story was first published without giving Veritas a chance to respond but we have since updated the article. We regret the error.

In 2014, Keith Riley’s domestic partner, Suzanne Collins, died of complications related to diabetes. The couple had been paying $793 a month for a rent-controlled studio apartment in the Tenderloin, where they had lived for two decades. Riley never expected that four years later he’d be peeing in bottles and facing eviction.

After Collins died, the building’s owner, Veritas, San Francisco’s largest property management company, filed paperwork to evict Riley, whose name wasn’t on the lease—setting in motion a jump in the unit’s way-way-way-below-market-rate monthly rent. As negotiations dragged on, Riley says, Veritas stopped accepting his rent checks and stopped performing basic maintenance, even after his toilet and shower stopped working, which reduced him to urinating in bottles or visiting coffee shops to use the bathroom.

Veritas says landlords cannot randomly inspect apartments and Riley did not alert them of problems until the firm pressed for resolution of a three-year long negotiation. Veritas COO Justin Sato said, “Veritas disputes all claims that we are hostile or negligent. We are proud of our record as a landlord. The data the city keeps about our work is contrary to such allegations.”*

With the assistance of the Eviction Defense Collaborative and the Housing Rights Committee, Riley reached an agreement to keep him in place. But after he was late on his rent three months in a row, the deal fell apart, and his eviction was scheduled for October 21. Disputing that account, a Veritas spokesman said, “Mr. Riley did not appraise us of needed repairs for years, and the conditions showed a situation of extreme self-neglect.” In June 2018, Riley signed a court-sponsored mediation in which Veritas forgave three years of rent, gave him $75,000 to cover his costs and to help find a new place, and agreed to four months to do so with a move-out of Oct. 21. There was no eviction.

Today, Riley, who is 54 and sorts packages for UPS and works as a home healthcare aide, is faced with bad options: hunt for housing in San Francisco, move in with his brother in Clearlake, or decamp to somewhere cheaper in the deep East Bay. “It’s the worst,” Riley says of the ordeal. “I just want to sleep all day every day.”

Riley’s experience highlights an aspect of California law that has long frustrated tenants’ rights activists: vacancy decontrol. When a rent-controlled apartment becomes vacant—whether through eviction or turnover—the landlord can raise the rent to whatever the market will bear. Supporters of vacancy control say that those jumps incentivize unfair evictions and that cities should have the ability to block dramatic increases. Opponents contend that without the ability to raise rents freely between tenancies, owners would be unable to earn adequate returns on their investment in a property or put money toward maintenance. With less profit potential, they argue, construction of new housing units would slow even more.

This November, California’s Proposition 10 will give voters the chance to weigh in. If it passes, the new law will effectively repeal the Costa-Hawkins Act—the current legislation governing rent control. That, in turn, will allow cities like San Francisco to reopen the decades-old debate on vacancy control.

Starting in 1972, 15 California cities—including Berkeley, San Francisco, Oakland, San Jose, Los Angeles, and Santa Monica—passed rent control ordinances, despite fierce opposition from the real estate industry. That opposition paid off in 1995, when Costa-Hawkins became law: Cities that had rent control were allowed to keep it, but newer buildings and single-family homes were made exempt, and vacancy control was abolished. As the housing crisis has worsened, however, Costa-Hawkins has come into the crosshairs of tenants’ rights activists. “Even three years ago it seemed far-fetched,” says Deepa Varma, executive director of the San Francisco Tenants Union.

Polling suggests that expanding rent control is a popular idea, at least in theory: A 2016 UC Berkeley Institute of Governmental Studies survey found that 60 percent of voters were in favor of stronger rent control. But Prop. 10 could still be a tough sell. Early polls show the no position in the lead, with opposition strongest in the Bay Area.

This ambivalence mirrors that of a new generation of market-friendly housing activists. Laura Foote, executive director of San Francisco–based YIMBY Action, is of two minds about the proposition, as is her organization. After a member vote, YIMBY Action declined to endorse or oppose the measure. “We were really close to 50–50,” Foote says.

Those opposed to Prop. 10 argue that rent control will only exacerbate the state’s severe housing shortage. “The long-term answer to face this challenge is building more housing,” says Steven Maviglio, a spokesperson for the No on 10 campaign. There’s also the specter of a legal challenge to the measure to consider, with a right-leaning Supreme Court unlikely to view rent control laws favorably.

The prospect of vacancy control looms largest for Prop. 10 opponents, according to David Garcia, policy director at UC Berkeley’s Terner Center for Housing Innovation. This spring, he surveyed landlords and members of the real estate industry. Unsurprisingly, the industry is against most forms of regulation, but many respondents were open to considering such new ideas as allowing new units to become subject to rent control after a period of time or instituting a cap on annual rent increases. Vacancy control, however, was a nonstarter. “Across the board, the policy that got the most pushback was implementing vacancy control,” he says.

That could set up a showdown in the event that Prop. 10 passes. Former San Francisco mayor Art Agnos likens it to his own unsuccessful fight to pass vacancy control in the city in the early 1990s, before Costa-Hawkins was law. “It was a very intense, hot issue, and we simply couldn’t put the votes together,” Agnos says. But that was long before the age of $3,000 studios and fights over Ellis Act evictions. He suspects that such a battle would produce a different outcome today. “Vacancy control in 2018 is basically a protection for middle-class ­renters,” Agnos says, “not just the poor.”

*Editor's note: This story has been updated with responses from Veritas.